People Risk

and
Corporate Ethics
People Risk ?
 Good Quality of
Board
A weak board  serious problem

because:
• Company move aimlessly
• Missing opportunities
• Creating inertia
• Stifling initiative
• Causing good staff to leave
 Get Strong
Board
Boardroom seats occupied by
Right person

weLL behAve

sHow iNtegRity
 Characteristic

•Have smooth transitions

•Able to identify the right
developmental assignments
•Provide meaningful appraisals and
feedback
•Use appropriate selection criteria
•Have a range of good choices for
each position
 Succession
Lack of corporate management of succession
 strategic risk

- reduce risk
- create a proven leadership model
- smooth business continuity
- improve staff morale
 Design a Succession Plan
 Obtain a management buy-in for succession planning
 Identify the future leadership needs of the organization
 Conduct staff reviews to acquire feedback, identify
problems and opportunities, and identify competencies
 Identify high-potential talent
 Recruit external future leader, where appropriate
 Give staff experience of different department and roles
 Create opportunities for people to grow within company
 Implement training, mentoring and coaching programs,
both formal and informal.
 Key Worker Risk

Lost of key workers..

Lost of company generator

Disclosure of confidential
information
Manage the Risk of Losing Key
Workers
Defensive solution
Contract  stopping ex-employees
from working with the agency’s clients for
a period of time
Aggressive solution
Rewards:
• Financial incentives
• Managerial responsibility
• Lifestyle benefits
 Managing
People
Excellent worker hard to get

Company should adopts good working

conditions, include:
• A more open and equitable management style, good
condition, and rewards for employee.
• A culture that values teamwork and excellence, condition
that assist female.
• Training and re-training to develop capability of
workforce accepting rapid change.
Companies that care for its
workforce:
• Willingness to listen and learn
• Implement changes which improve workplace
conditions
• Share corporate information with the
workforce
• Involve workforce in decision-making
will
 Effective Recruitment
 key to organizations retaining
competitive edge

Having the right

processes helps select
the best potential
candidates
 Managed by…
• Preparing a job specification
• Creating a personal specification, outlining
the required experience, abilities and
qualifications
• Undertaking the right method of
recruitment
• Training managers to be effective
interviewers
• Checking CVs and taking up preferences
Ensuring that as many of their
meet
staff as possible
their customers.
 Risks of being Sued by
Employees
Actions to obtain risk management coverage:
Employee Actions
– notify
– cooperate in investigation

Agency Actions
• Immediately notify Risk Management
• Assist in the investigation and defense
• Establish internal procedures
• Train staff in the requirements of the policy

Risk Management Actions

Risk Management will investigate the claim or complaint to determine:
a) whether coverage will be extended
b) whether to settle or defend the case, and
c) whether to defend under a reservation of rights.
 Workplace Bullying

Forms
• Sexual harassment
• Demeaning comments about the victim’s race, gender,
disability or age
• Verbal assault
• Shouting and offensive language
• Constant criticism
• Overwork
• Isolation
• Jokes about the victim’s appearance.
Prevented by...
• Anti-bullying policy
• Training
• Systems for investigating
• Informing staff
• Investigating complaints quickly
• Appointing a discrimination and bullying
advisor
• InDustrial DiSpute
Hazards…
 Lost output
 Bitter industrial relation
 Lost of reputation
best solution
ensure that the company is
seen to act
fairly
and honestly.
 • LAboR DiSputE

Respond…
Union
Be consistent
Require staff to obey the law.
Have nothing to hide.
Give regular briefing to the media
Communicate directly to staff.
If the dispute seems
inevitable…
• Build buffer stocks
• Move production to other plants
• Sub-contract work to
competitors
 Conflict in the business
Minimize the price + maximize
the profits
=
providing the cheapest
product/services for the
highest price
 Changing the
Corporate Culture
Companies often profess to act honorably
but behave unethically
So good manager is needed to change the
corporate culture
 Damaged cause by ethical
failure
Unethical activity can do irreparable
activity to the company
Its difficult to keep unethically activity secret

because of existence of force like

• Whistleblowers
• Media
 Ethical failings
Companies are often doing
unethical activities and
since it does not constitute a
criminal offence, it more
difficult to manage or stand
up to.
Relations with the Government
Example of corruptions relations with
governments include:
• tax evasion; operating false transfer pricing
• excessive payments to political parties
• failure to obey the law
• selling to tyrannical
overseas regimes
 In Indonesia

Direktorat Intelijen dan Penyidikan

(DitIntelDik) Ditjen Pajak reveal
hundreds companies that fake
the tax form and causes more
than 20 billion rupiah lost to the
state
 Attacks on competitors
Example:
• Illegally obtaining information bout
competitor. For example by luring away
or bribing their staff
• Making false allegations about
competitors. For example through the
sales force
Unethical Alliances
with
Competitors
 products
Ethical products failures include the following:
• Producing product which are environmentally
unsound. For example cutting down the
rainforest.
• Testing non-medical products on animals
• Selling product or services which are poor
value for money, or which could harm people
 In Indonesia
In Indonesia selling cigarettes is such
an ethical product failure but its still
sold since the manufactures reserve lot
of people for being employee. And the
government just put suggestion in every
pack of cigarettes
 staff
 Company must pay attention in
workers health and safety. Low pay
and bad working place are seen as
exploitations and the cost of any
resulting public relations crisis can
be damaged the brand image.
 suppliers
•The problem party lies with the drive for the
lower prices, which resulting in cheaper
supplies
•Using child labor in the developing world
•Entering into illegal agreements with the
suppliers’ staff to dishonestly obtain goods
• ethical failure include failing to take
precautions against damaging the
environment; or knowingly causing
damage
companies are in dilemma
because their products are both
essential to modern living and cause
environmental damage
 customers
Ethical failings toward customer
include:

• Giving bribes to customers in

return for business
• Doing business with criminals
Giving Misleading Informations
Giving misleading information can inflict
financial lost to the customer or other
parties.
Mostly happen in insurance
company or bank.
The company can be accused of
doing deception and forced to pay fine
to the customer.
 Withholding information

“not giving the whole

information to customer or
other party in order to get
advantage”
 bribery

“giving some money in order to make

the business goes on”

In some countries bribery are seen as an

essential prerequisite to doing business
 Dealing with Unethical
Competitor

“everyone else in the market does

it. Well lose out if don’t”

that statements just like legalize

company unethical activities
Undertaking an Ethics audit
 Issuing an ethics policy

The company should issue a code of

practice that will clarify individual
responsibility and alert people
of malpractice.
 Communicating the policy

After the policy issued, it’s

important to top manager to
communicate the policy well so
it’s known by all members and
staffs.
Karoshi

Death caused by overwork

Nearly 1000 victims death

from
overwork each
year
 illness  Death
Overworking  Stress
suicide
 Sign Of Stress
• Headache
• Tiredness
• Muscle tics
• Stomach problems, diarrhea, constipation
• Anger, frustration, violence, aggression
• Anxiety
• Increased use of alcohol, tobacco, drugs, or sleeping pills
• Depression
• Feeling powerless
• Irritability with customers and co-workers
• Problems at work, such as forgetfulness
• Absenteeism
 In Long Term….

• Ulcer
• Heart Attack
• Cancer
• Stroke
• Death
Karoshi Cases in Japan

• Mr.kanameda, worked at a major snack food processing company as long as

110 hours a week (not a month) and died from heart attack at the age of
34.

• A bus driver, worked more than 3000 hours a year and without rest for 15
days just before his fall from stroke at the age of 37

• Mr.Miyazaki, whose widow get workers'compensation award only after 14

years of his death, worked at the world-biggest printing company in Tokyo
for 4320 hours a year including midnight work and died from stroke at the
age of 58.

The number of Karoshi among female workers is increasing after enactment

of the Japanese Equal Employment Opportunities Law.

• Miss Yoshida, a 22-year-old nurse, died from heart attack after pursuing
consecutive 34 hours' duty five times a month.
• Miss Iwata, 23-year-old teller at a major bank, worked illegal overtime
over 50 hours a month and died from an asthma attack.

• Mr.Yagi, who worked over 70 hours a week at an advertising agency and

spent 3.5 hours day in commuting, died from heart attack at age of 43,
Average number of overtime work is
increasing

130 hours in 1975

185 hours in 1990 (245 hours in large enterprise).
In 1987 200 hours longer than in the U.S. and some
500 hours longer than in France and in Germany.

Japanese male workers actually

work 2700 to 3000 hours a
year.
Suicide Because of Overworking
 Reduce WorkPlace Stress
• Undertake an audit of employee attitudes and stress levels
• Provide clear job description and lines of reporting
• Ensure regular upward and downward communication, and ensure
employees’ opinion are heard
• Make work more fulfilling
• Increase the amount of control that employees have over their work
• Ensure that workloads are managed and balanced
• Increase employees’ technical work skills
• Give employees better coping strategies, such as improve diet or
exercise, or strategies for dealing with abusive customers
• Improve support and supervision
• Enhance working conditions (noise, breaks, fumes, so on)
• Implement a fair reward system
• Increase job security and career development
• Increase flexibility in working arrangement
• Introduce stress management training
Amazingly Comfortable
place
to work ???
Thank You